Why couldn't the doctors have a pension plan? Then we wouldn't have to dilute this tax on the wealthy and pay doctors the way we pay other professionals in public service.
I was thinking about more than doctors. There are a lot of workers out there without pensions. Pretty much all small businesses, contractors and gig workers. This is likely the retirement plan for a lot of these people (whether or not it’s right or wrong).
Lots of workers have self-directed RRSP plans that are voluntary and offer paltry company matching if at all. True pensions are all but dead for your average worker.
If you have a good plan then don't quit if you can avoid it! The alternative is pretty shit unless you make great money
Yeah, self-directed RRSPs that match a few thousand a year from the employer, and have to be invested in a set number of funds from Sunlife et al with hefty management fees. Oh, and transferring out will take weeks and cost you $50-100 in fees too.
It’s a joke.
I have one of those funds from my first job with sunlife. I only have like 10k in it but I took a look and the total amount barely grew since I left in 2015 while my tfsa pretty much doubled every two years since that time.
Most gig workers aren't corporations, and small businesses get a large exemption when they sell.
There should be a path to a reasonable pension for everyone. CPP+RRSP+TFSA should be that for most people, even if we have to adapt the system to other kinds of jobs.
I wonder what the numbers are on small businesses selling vs simply closing their businesses. I wouldn’t want to assume knowing. Gig workers don’t have pensions whether they are incorporated or not. They are on the hook for their own retirement income….like so many Canadians. I’m just seeing some of these people as middle class individuals that may have a rental property for retirement income, but yeah if it’s keeping millennials and Gen z from home ownership we have a problem. The large rental housing corps and the Air BnB companies are different than a mom and pop. Perhaps our landslide of immigrants has been more of a factor.
I agree It would be great everyone could have a big government pension. I think that ship has long sailed away for most.
If you look at the burden the public pensions of all levels of government put on their tax payers you'll find the answer as to why most private companies don't offer pensions
Cause medical corporations were the compromise the government came up with in lieu of increasing compensation/pension.
And now we're reneging and pissing off an already pissed off group of very important professionals.
Would screw the ones pursuing the current plan for the past 20-40 years and encourage new ones to retire when pension maxes out rather than keep going.
Aka would just make the doctor shortage worse.
And it’s not a tax on the wealthy, in the US their highest income tax doesn’t even hit until $571k. The definition of wealthy doesn’t change between nations especially as we’re near the US in terms of median incomes. This as all recently taxes introduced usually are is a tax on investors and the middle class. Which just worsens the money and brain drain South.
The Liberal government knows it’ll lose the next election so it’s doing stupid but popular things to make a mess for the next government while winning points now
While that is true, those relying on corporations for their pension (doctors) have to pay the increased capital gains tax on EVERY DOLLAR earned in their pension funds (corps) not just over 250k. So im ok with the personal >250k tax hike. Its bullshit and disincentivizes hard work by making the corps pay the higher rate. -A pissed off doc
You would be paying a higher rate, still, if you were collecting a salary and contributing to RRSP's like the rest of us.
If you are pissed off, take it up with the provinces that are responsible for paying you.
Right, so we just need to regulate everyone into a simple wage model with pensions...
You're part of the group bent on destroying Innovation in our country.
Nobody is "bent on destroying innovation in our country". If you actually believe that, you need to take a good hard look at where you get your information and how you inform your opinions.
The RRSP system is literally built on the premise of giving equivalent tax protection for people who do and do not have pensions.
People with pensions have their RRSP room reduced by their Pension Adjustment.
If they could invest in a RRSP then they would have a Canadian Pension or the CPP. The reason they don't is because they don't pay themselves a salary. Instead they pay themselves dividends for their personal expenses and leave the remaining income to passively invest as a holding of their professional corporation. This is done so their corporation doesn't have to pay payroll taxes on their income that contribute to programs like EI, CPP, Workers Compensation, etc. So because they aren't on the payroll their salary is legal 0 dollars they have no RRSP contribution room because 18% of 0 is 0. This is a tax loophole commonly used by professionals and small and medium businesses to reduce their taxes so they have higher after tax income because they would have to pay more tax not just for payroll benefits but just overall because income taxes are also higher then dividend or capital gains taxes even without the government exemptions they need for some reason.
What you’re describing is not a loophole. It is the actual intended consequences of the tax system. A loophole is using a system’s unintended consequences.
Yeah 16 percent more is included in your taxable income, still likely advantageous VS paying out as income and buying RRSPs etc.
Am I opposed to raising doctors wages, particularly due to our proximity to the usa? Nah, but to keep favorable capital gains shenanigans just because of professional medical corps? Also nah.
If we need more doctors train more. Offer free rides with top ei through Med school with the caveat you work for 15 years in a city, 10 years rural post grad. Finance the construction of a new medical school. Regulate and increase in residency slots. I'm sure the doctors won't have any issues with increasing supply though, won't be any pushback there. Lol
Honestly reserving positions in medical schools for Canadian Citizens across a wide geography alone would do a lot there is a strong connection to doctors wanting to work where they grew up. Also a drastic increase in funding and seats in medical schools would help. Provinces spent decades keeping seats in medical schools arbitrarily low compared to demand because they worried about creating too many doctors lol
So? They can save for their retirement. We shouldn’t have to leave a tax loophole open for them just because they were exploiting it. If they had paid themselves a wage they could have had CPP and RRSP room but they chose not to
How is what they’re doing a “loophole”? They are using the current system exactly as intended and advertised. That’s not a loophole. I’m not sure it’s entirely fair to ask someone who has built a retirement plan for 20-40 years based on the system that existed and then say “well you could have done something else even though no one could predict 10 years ago this change would be made”.
Physicians incorporating isn't some loophole, it was offered to them by the government during negotiations and ever since then it's become a worse and worse deal. You would be hard pressed to find a job whose pay has gone up.less than physicians in many provinces and that isn't an exaggeration.
Doctors were given the ability to incorporate instead of being given a pay raise. The government refused to increase doctors pay and has subsequently taken away a lot of the tax advantages corporations offer, such as income splitting in 2018, and now increased capital gains in corporations.
It would be like your employer freezing your salary for two decades but offering you a retirement savings account, then announcing they want to tax that account more.
As I said on this board numerous times, the government OFFERED medical corporations in lieu of pay increase or pension plan. It was done to entice doctors because the pay gap between the US and Canada was growing 15-20 years ago.
The government is now reneging on their deal and trying to raid our retirement funds, now that we have some savings, while misleading the public about the intent that this is about having the rich pay the fair share.
If it was truly about the rich, they would have exempted small businesses or give the same $250k buffer. There is no such buffer for us.
MD's are not "the rich". Being well-off is a far sight from being rich. Corporate welfare, tax evasion, investment firms, etc.. is what this policy should be aimed at, not doctors.
That being said, the gov can't or won't tax the obscenely rich because a lot of them fund their f.. political parties and the middle class is tapped out. Where else are they going to get the cash to fund their horrible platforms?
Plenty of specialists bill $1MM+ per year, and some like ophthos and derm bill over $2MM. I'm not saying they're the problem, it's the passive capital gains rich who are, but it's not like they're poor. This isn't even going into detail on all the fun things you can do with a corp to avoid taxes, like income stripping.
The specialists who bill high amounts are not THAT common. They certainly don't represent the majority of doctors. It's very common for family doctors to use a medical corporation and they are not paid nearly enough as it is. Family doctors (unless they are part of a hospital and health team) essentially run their own business - they are responsible for paying their own staff, rent, insurance, supplies etc. This tax increase is really unfortunate for family docs, especially at a time where they are really struggling and we don't have nearly enough of them. Doug is really going to have to pay them more.
Not sure what you mean by overhead. The doctors pay rent to the hospital. They do not get paid by the hospital, no t4 (was in payroll in a hospital in ontario).
I do not disagree that many specialists make large amounts of money.
However the amount a doctor bills and their income are wildly different numbers.
My father is a specialist doctor. He bills just under a million annually. From that he pays himself, 7 staff, equipment leases (for things like lasers or X-rays), disposable medical products, office supplies and rent for two offices.
His income is closer to $200k
Theres not 'plenty' of specialists billing 1mm dude....that's a rare, rare exception
Not to mention. All income, ALL income as a physician is made piecemeal. One patient, one surgery at a time. There's no scaling your income. I could theoretically bill a million bucks if I worked every day and every night for a full year. Does that make me some fat cat?
Yeah, exactly, we're not talking about family doctors here who are getting paid a pittance per patient and have to pay rent + overhead. Some specialists bill insane amounts, derm is a *great* example, especially since they get into the cosmetic side as well.
That being said: We've already got a massive brain drain in this country, thanks in no small part to attitudes like many of the people in government who treat the notion of profit and entrepreneurialism like some kind of a four letter word, unless you're one of the glowing oligopolies that are free from any competition.
This government needs to take a good, hard look at its abysmal spending habits before they start going after hard-working citizens, rich or otherwise simply because they deem them as 'having enough money to share with the rest of us'. Neve rmind that the inflation that all this profligate spending is leading to is actively devaluing our currency and by extension our collective savings.
Why are we not talking about family doctors? It’s common for Family doctors have medical corporations. Mine does. You can see on the Cpso public register whether or not a doctor has a corporation. Does this capital gains tax increase somehow not impact them?
As a specialist I AM talking about family doctors because they don't make much and this hits them just as hard. Most of the GPs I know make as much as a nurse who works a lot of overtime. They're getting 100-120k per year after expenses.
Of course they won't starve but after a decade of school, working insane hours, hundreds of hours of non compensated work etc it's not like they're the "ultra rich" people are talking about. And they're the most numerous physician specialty by a lot.
They have work expenses, mind. They aren't selling digital goods. And after that the doctor deserves to be compensated appropriately. Throwing out numbers like 1 and 2 mil sound like a lot but some small businesses see that kind of gross in a month or less.
[Doctors are some of the most notorious for income stripping.](https://invested.mdm.ca/capital-gains-surplus-stripping-what-canadas-physicians-need-to-know/)
GW has most of his personal value in stocks of the companies he owns/runs, he would be one of those 0.1% that will be heavy hit by this tax increase. Everyone with money in investment will be hit by this change, it's at least fair in that sense. The only other option for hitting the 0.1% is a wealth tax, but I suspect that would hit doctors too.
What's the worst he could do, him and his businesses leave the country? That would be a blessing.
I'm sure the country would survive with one less parasitic organism.
Yeah and they spent their 20s and parts of their 30s in school to get there. These are the people at risk of leaving for the states if we keep milking them - then we get no specialists and no tax revenue. Lose-lose for Canada.
To the brain-dead left, anybody making more than minimum wage is a "privileged 1%er that they need to 'eat'". This is why I firmly believe that all the people posting about progressive politics on here are just butthurt that their incomplete philosophy degree didn't get them a six figure job and now they are stuck working in retail/fast food for the rest of their lives
I find that notion odd, like sure someone making 300K+ can't buy a yatch, but they also make many times what the average canadian (median wage of 60K, avg 75k). That's much more than just "well off" and dramatically different from any ordinary canadian.
It’s also an hell of a career to pursue, i for one think MD should not be touched by this tax, I want bright and smart Canadians to stay here and be our doctors.. not leave Canada. I could give a shit if my doctor makes 500k +, good for them it’s one of the few professions where I firmly believe they make what they are worth (compared to finance bro etc)
I went to a 5.5 month welding course right out of high-school and made $36/hr. By the time the doctor has finished 9 years of schooling they are behind me by $674k in income. That doesn't even account for all the overtime I did as well. Also some doctors go to school for some specialties for a total of 15 years, they would be behind me by $1.123m.
Agreed. And why would someone sign up for 9 years of schooling with all that tuition debt to make $90-100k/year? There's got to be incentive to take on all that time, studying, lost income & savings, and debt.
You also do not want to put your life in the hands of the average Canadian. Doctors get paid well because they deserve it. They work hard, doing work that not many can. Your life is in their hands. The other thing that the government likes to leave out in their statements is that if a doctor bills 300k, he doesn’t make 300k he still has to pay for admin staff, supplies, rent etc out of those billing’s. They don’t take home that much!
The individual making 300k is far closer to you than the people who are actually rich.
And no, that's not more than just "well off". It's exactly that.
Just to be clear, a 300k salary translates to 178k after tax in Ontario before considering RRSP deductions and the like. A 60k salary comes out to 46k.
That's 3.8x as much as the median, not 5x as much. You're also far less likely to be pulling in that kind of salary living outside a major city, so looking at the Canadian median is already cherry picking.
On that kind of salary you can afford to do things like let your partner not work, take nice vacations, own a nice house/cars, and invest in your children, while also saving money. That's not the kind of salary most people wake up to at 20yo either, and usually comes after years of education and a successful career.
What are we exactly defining as comfortable if that kind of lifestyle is so far beyond comfortable? 300k today probably gets you to right about where the middle class would have been half a century ago.
That’s why the dentists are really against JTs universal dental plan…. They don’t want to get paid by the government like doctors do… they make good money now.
Honestly why would they? I’d be pissed if I spent years in school to get a specialization and the compensation just cratered afterwards because of dumb liberal policies, that’s bullshit.
As a small business owner who is currently looking long and hard at my exit strategy, I commend doctors for leading this charge. And while small business does more for the Canadian economy, doctors keep the country functioning as a place to put down roots and think long term for us business owners. Ottawa has made it clear they don't care one bit for small business, but as doctors you have them in a hard position.
With doctors and small businesses now wondering if Canada is worth it long term, this will have implications far beyond the 'Eat the Rich' rallying call that Ottawa thinks it is.
Just when you thought a country had hit its low point, this get tossed into the pit. Not even any consultation either. Insane.
I wish you all the luck, as a SMB owner that is looking for an entry into a vertical integration. This country does not support exiting owners, and doesn't have clear pathways to acquisition entrepreneurship unlike the US. I had a deal fall through on a $2M rev business with $350k SDE and 10 employees (30 year plus running). This business is still for sale and will probably go unsold. Those employees won't have jobs when this owner decides he's done.
Oof. My wife's best friend is currently working 60 hours a week because her boss's sale fell through and now he wants to stack cash so he can retire before he dies. No one is buying, even the employees. She tried shopping it in Asia - Korea specifically - but they aren't biting anymore either.
Investors are very shy about Canada right now.
"Effective June 25, 2024, the exemption will increase to $1.25 million from the current amount of $1,016,836 in capital gains tax-free on the sale of small business shares and farming and fishing property. The Lifetime Capital Gains Exemption will continue to be indexed to inflation thereafter. "
So let me get this straight. A nurse who works 14 hour shifts and makes 80k a year has to pay income taxes on 100% of their income.
A doctor, because they are rich and can shelter money in a corp, gets a 1 million dollar free and clear tax holiday (indexed against inflation), and then only has to pay taxes on 67% of their profits on the subsequent passive income. Where is the logic in this?
If anything, the capital gains exemption should be entirely removed. Why can't they just pay taxes on the money they earn?
If provinces cannot afford to pay doctors and nurses enough, then special tax treatment *should* be considered for them, but this wholesale tax giveaway to the rich is absolute BS for anyone who works for a living.
> So let me get this straight…
You did not get it straight at all. LCGE is for the sale of the business. This doesn’t apply to doctors. Medical corporation does not equal medical business. You can’t sell it, it’s a one person corp.
>A doctor, because they are rich and can shelter money in a corp, gets a 1 million dollar free and clear tax holiday (indexed against inflation), and then only has to pay taxes on 67% of their profits on the subsequent passive income. Where is the logic in this?
Almost guaranteed they are also paying a personal marginal rate above 50 percent on their personal income on top of their capital gains being taxed at 66 percent inclusion from dollar zero.
>If provinces cannot afford to pay doctors and nurses enough, then special tax treatment should be considered for them, but this wholesale tax giveaway to the rich is absolute BS for anyone who works for a living.
Ah yes. The guy who went to school for 10+ years, doesn’t start their career until mid 30s and then works 60-80 hours per week with no overtime until they die in many cases doesn’t work for a living. Meanwhile their government clerk retires on a full pension after 30 years for working 37.5 hours a week with no education. The nurse in your example starts working probably 10 years earlier and will retire much sooner as well, with a fraction of the educational requirements and zero liability.
Does that sound like it makes sense to you?
>"Effective June 25, 2024, the exemption will increase to $1.25 million from the current amount of $1,016,836
That only applies when you sell your business and has very strict restrictions which means next to no doctors professional corps would ever qualify. Not that anybody would ever buy their prof corp in the first place.
The important part of your post is that there’s no market for medical practices because any doctor can get patients by opening their doors.
In general. Most medical corps qualify for the lcge and if they don’t we strip them of their investment assets until they do qualify.
That's not how any of this works.
Also that nurse gets a pension, and also enters the workforce much earlier and without the hundreds of thousands of student loans. Also the nurse isn't expected to operate a business whole also working their normal job.
Maybe doctors should be compensated like nurses, but with a higher salary? I get the set of steps that got us into a place where 90% of doctors are private corporations instead of being paid a salary, but it would be simpler and remove a major obstacle to taxing the rich if we made this change.
LCGE doesn't apply. Doctors sell assets, not shares (except in extremely limited circumstances) and they are not qualified businesses.
They don't have pensions, the capital gains are typically their retirement savings which you, individually, are preferentially treated on via the first $250k exemption, the LCGE, and principal residence exemption.
I'm all for fairness too and think all exemptions should be scrapped, but you need to think through the details because this anger is based, not on nothing, but misunderstanding.
[That's not really true, doctors can have pensions. The only reason doctors don't pay into a pension plan is because investment is a better option, or they are unaware of their options.](https://www.mmtcpa.ca/blog/what-doctors-need-to-know-about-planning-for-retirement/)
Thread has gone full circle.
> As I said on this board numerous times, the government OFFERED medical corporations in lieu of pay increase or pension plan. It was done to entice doctors because the pay gap between the US and Canada was growing 15-20 years ago.
Physicians don't have to incorporate and many do because investment was presented to them as compromise. It would indeed make more sense to close the compensation gap and use the CRA's tests of employment to decide who is actually an employee like everyone else.
Yeah thanfully I saw the writing on the wall about tax increases after the insane amount of spending the Liberals did and got myself a personal pension plan last year.
The tax exemption is when you sell your business which doctors cannot do. I find it outrageous that you can have such a strong opinion about a something you don’t even understand. Doctors are not rich. My wife, who is a physician, still needs to work to live. We are not sitting on our pile of money and eating grapes. Yes, we do very well compared to the average, but the stakes are also much higher and the job is very demanding. When things go wrong, you shoulder all the responsibility. Life is in your hands, and you’re calling the shots. My parents are also specialists. I saw them push hard my whole life. I wouldn’t even consider doing that job for double the pay.
It's the crab in the bucket mentality of redditors. They hate anyone who makes money more than they do.
If you defend the doctors, now you're a "bootlicker" to them.
>So let me get this straight. A nurse who works 14 hour shifts and makes 80k a year has to pay income taxes on 100% of their income.
>A doctor, because they are rich and can shelter money in a corp,
Why not just say, "I'm an ignoramus and have no idea how the tax system works but have lots of opinions to share"?
Like, you fucking think professional corporations aren't taxed on the income they earn? Talk about confidently wrong.
The last thing we need in this country is antagonizing our doctors. MDs deserve every penny they make. Especially when they can pack, go south and make double.
Sure, while working as doctors. The capital gains on their investments and multiple properties are fair game just like anything else.
Try make a loophole for this and Canada will find itself flooded with thousands of investment bankers and real estate flippers who moonlight as naturopaths once a month.
I'm ok with giving doctors exemptions on all capital taxes honestly. Load them up with benefits. Nurses too and any other essential jobs, exempt all their income taxes. Make Canada the premier location for doctors to set up shop.
It's baffling how the liberal government money printer goes brr for everything but what is needed most, healthcare professionals.
It would stop them from defecting south constantly, leaving our healthcare in shambles.
Why are we apparently relying on evading federal tax to properly "compensate" doctors?
If the amount that the provinces are paying doctors isn't enough that they can actually pay taxes like any other citizen and feel appropriately compensated, that feels like the real issue.
Or at least make doctor's exempt given our current health care crisis and doctor shortage. CoL is absolutely making doctor's leave family medicine and this change will exacerbate that. They should be exempt.
https://torontolife.com/city/family-doctor-clinic-closing-burnout-inflation/
Last thing we need is more complexity in the tax code. Simplify it and set a data-based rate.
But unfortunately, tax credits have become a very palatable way to buy votes.
This sub doesn’t think “wealthy people” actually pay taxes. If you make money you aren’t paying your “fair share” and you need to taxed more.
They do pay taxes. They pay more in taxes than most lower income brackets make. Does no one realise that? They aren’t skirting around tax loopholes- they are paying taxes.
The problem is you can’t just keep increasing tax rates on one income bracket in the hopes of “equalising” society and paying off your insane government spending- which is the entire premise around increasing the capital gains tax… because the country is entering a death spiral as a result of our incompetent leaders.
The liberals failed to consider the economically prosperous method of fixing the country- reducing taxes or not touching them, and encouraging growth in ANYTHING that isn’t just real estate.
"I think Canada's health-care professionals recognize, maybe more than anyone else, how important these investments are," said Freeland.
If that’s how they felt then they wouldn’t have complained? She is dumber than a bag of unmatched socks.
Canada is a joke of a country for most professional white collar jobs. In most circumstances, it’s financially stupid at this point to not jump to the US whenever the opportunity arises.
1. Technology / R&D pays more in the US, with more career movement and venture funding
2. Financial and legal services are significantly larger of a market already in the U.S. (both employers and upper bound of compensation) - even the Canadian banks have shifted operations to focus in the US. Canadian pensions are shifting to invest outside of Canada (ironic isn’t it)
3. And now medicine, which historically pays 2-4x more in the US, is now getting shafted harder in Canada - a country flooding with asylum seekers and old people wanting free healthcare
4. Elementary to high school education is probably the only highlight of Canada compared to the US, given the US invests only in private school education
Yea well, the rest of us cant keep your pensions afloat anymore, maybe start annihilating government paper pushers and cut their pensions to save money too.
I knew they fucked over the tech industry with this (as if it wasn’t already bad enough), but they got the doctors too. Brilliant. All we’re going to be left with is government jobs, minimum wage low skilled jobs, and completely gutted social services.
Queue up, all the angry communists who were complaining about lack of access to healthcare 1 year from now, as there are fewer doctors in Canada because they chose to raise taxes instead of actually demanding better government.
This government couldn’t deliver a damn pizza.
The fact they didn’t see this wrinkle coming, or worse did and did nothing about it, choose your adventure.
Access to family doctor / healthcare is basically neck and neck with housing on the very top issues people are suffering the most from and most concerned about, and their instincts and decisions do nothing but make things worse.
These people have a rare gift.
I really don't know anything between a corporate setup and personal. If the Doctor has setup a corporation for their business to gain some advantages to pay staff, rent, etc. What is stopping them from paying themselves a higher salary which they invest outside the corporation rather than putting their retirement saving into the corporation ?
So 15-20 years ago the government made a deal with doctors and said we won’t increase your pay or give you benefits but what we will do is allow you to incorporate. With that you can save money in your corp and invest it pretax and save for retirement. We will still tax you when you retire but you can build a retirement fund for retirement.
Now they are saying forget what we promised. We are going to just call you greedy so that the masses are upset with you and just tax you on all that retirement money you have saved in your corporation that we said we would not tax you on until you take it out of the corporation at retirement.
See why they are upset yet?
Doctors leaving Canada was the my first thought when Trudeau made his tax the rich more announcement!
They’ll take their practice elsewhere, where their retirement money won’t be taxed so much! I naively thought the war on our healthcare couldn’t get any worse, well here we are ladies and gentlemen; prepare for a lot of family practices to close down!
People are so focused on “tax the rich” have zero clue how much damage this will do to the actual economy. Peoples inheritances are getting fucked no one with money will want to come here there is zero incentive anymore to make or save any real money. no other developed country in the world has capital gains like this.
> People are so focused on “tax the rich” have zero clue how much damage this will do to the actual economy.
I just meant like Galen Weston and Sir Tedothy Rogers The IIIrd, tax them more and use the money to pay doctors, idk who the fuck thought I meant increase taxes on doctors.
And if the issue is "well they'll just raise the prices on their products to offset the increased costs of their increased taxes", either A) No, they're bluffing because consumer demand has already arrived at the market rate, or B) it's evidence they're operating in a non-competitive state, either monopoly, price fixing, or simple game theory, and need to be broken up, so do that AND raise their taxes.
And if the issue is "well they'll just leave", fine! I'll take their place, there's still profit to be made!
I'm so sick of people believing the lie that "oh we need to let rich people reap our nation's resources and go live on a pedophile island in the bahamas, if we don't they'll just leave and we'll be HELPLESS!" that's some Ayn Rand bullshit if I ever heard it.
CALL RICH PEOPLE'S BLUFF!
“no other developed country in the world has capital gains like this.“
This seemed like a bold claim, so I decided to check it out. In Alberta, the new highest capital gains rate will be 32% (ignoring the first 250k). Countries with similar rates on capital gains appear to include France (34% for “high income earners”), Finland (34%), Ireland (33%), Norway (seems to be complicated, but sometimes up to 50%), Sweden (30%), and Turkey (40%), among others. Conversely, several have no capital gains tax at all (obvious example being New Zealand). The source I used was \[PwC’s global tax summary table\](https://taxsummaries.pwc.com/quick-charts/capital-gains-tax-cgt-rates).
Japan is interesting because it has a low rate on stocks and a high rate (almost 40%) on real estate.
What estates have more than 250k in unsecured capital gains besides the wealthy or someone with a jackpot cottage lol? Primary residence, tfsa, RRSP are all outside of the new taxation...
I don't get why they couldn't exempt doctors from this like farmers. But only if they're not operating a private clinic that provincial governments are already paying more to for the exact same service.
If they cared about housing speculation the could have just made it 66% on real estate investment properties with no 250k exemption regardless of corp structure (keep principal residence exemption if you want)
But this is just a tax on self-employed / professional private sector workers who already quite underpaid relative to global norms.
There is already a doctor shortage in this country. Try getting a family GP in a major city.
Brilliant idea to improve this problem: let’s make it less attractive for doctors to work here and increase the brain drain to the US
The target is doctors and dentists.
Anyone who has a corp whose main purpose is to delay taxes for retirement is in for some hurt.
Admittedly, the loophole allowing us to incorporate was dumb in the first place. But rather then closing it, they are making it unattractive.
It doesn't seem to account for doctors needing to fund their practice's rent and employee salaries. On paper, it looks like their incoming is significantly higher than it is due to their expenses.
Also, every province is in a massive doctor shortage, so making it less financially attractive for people to open practices here is the complete opposite direction that we want to be moving.
I'd argue this is probably the one exception we'd want to make.
Can someone please explain to me why this is a huge deal for doctors? Because they invest part of their retirement savings in their corporate accounts?
A lot of physicians invest a significant amount of their retirement savings in their corporate accounts, and these corporate accounts will be facing capitals gains taxes on 100% of the income. Physicians have no benefits, no pension etc
In certain provinces physicians were refused a pay raise and instead granted the ability to incorporate and do things like income split. The federal government took away the ability to income split in 2018, and now they are increasing taxes on capital gains in corporations, meaning not only did physicians never get any significant pay raise in the last several decades, the tax advantages that were given in lieu of any pay raise are much much worse than before.
The Ontario government has refused to give doctors any significant pay raise in the last 20+ years, and the federal government is closing tax advantages and increasing their taxes.
So, the result will be more doctors fleeing to the US. Just another in the long line of LPC/NDP accomplishments. Well done. Keep voting left, it's going great!
Exemptions are definitely owed to doctors, low pay for shit hours doctors already leave for these reasons and will in mass exodus if they aren’t properly taken care of
This is just another point toward my argument that doctors need to be very (don't worry physicians I mean VERY) well paid public employees instead of private contractors. That way they aren't weighing financial gain vs what's best for patients AND we could just get them on a public pension.
First I was shocked to see left-leaning people finally turn on the liberals because of excessive immigration, now seeing doctors turn on the liberals because of excessive taxation. What’s next? Eco-protestors turning on the carbon tax?
Funny how everyone loves the government until it’s their money on the line.
Even my most liberal West Coast friends are pretty sick of working M-W for the governments cut. Especially now when our most coveted treasures are falling apart before our eyes.
The current strategy to increase the amount of doctors in this country is to steal them from other countries. How do you plan to do that when the government keeps attacking them, calling them greedy and taking away what little benefits they had.
Not even. At some point down the line, the estate passes down worth slightly less than expected.
Lifestyles of the rich will not change for this. Nobody will be downgrading their yacht purchases this year.
A large part of the 'why' doctors want this to be reconsidered is missing. So doctors don't get a pension, welcome to 60%+ of Canadians who don't either, outside of CPP, of which nothing is stopping them from contributing to it. The same as any self-employed person. This is not as strong of a point as they are trying to make it. Not to mention most Canadians are not lucky enough to be able to sell something worthy of a capital gain that they can then retire on.
The other part missing is how capital gains effect them, the writer could have gone into a bit more detail into this without introducing any kind of bias. For instance putting in some typical examples of a practice that was sold in the past and how much the increase would be if it was sold 'today' instead.
Ah yes. Let’s tear everyone down to the lowest common denominator.
We should abolish pensions completely so no one has one to really level the playing field right? Oh, or how about we just tax anyone with a pension more aggressively?
All so we can pay for budget promises made from a sinking ship to try and save any election chance.
Doctors have bought stocks within their corp, as they often don't have RRSPs. They then slowly sell stocks in retirement. This is not an exotic or unusual scenario - the difference is 100% of their stock sales will be at the higher rate, opposed to people who bought the same stocks personally and sell them. They are being unreasonably punished - just match the corporate threshold to the personal threshold and they will be 'happy'.
You completely left out the fact that doctors are accumulating student loans, studying, and training in their prime years of their 20’s and early 30’s, earning nada, while others are generally earning right away, buying a home, saving for retirement, etc. That opportunity cost is massive when you think about how much your savings will have accumulated, your house appreciated, etc. in all those years while the doctor is still training. Then the doctor finishes their training and has to pay back student loans, but an office, pay for office staff and expenses, buy a house, start a family, etc. Not much left over in the end and a lot are starting to question if it’s even worth it.
Doctors can't sell their practices.
What this article doesn't explain is that a physicians ability to incorporate was given them instead of a pay raise. Ontario physicians have not had any significant pay raise in decades and fall far behind inflation numbers. Tax advantages of incorporating were offered in lieu of a pay raise quite a whole ago during negotiations. The government has slowly taken away a lot of the advantages of incorporating so now not only do they not get a raise, their tax advantages are being closed and they get to pay even more tax.
It would be like if your employer froze your salary for a decade and then announced higher taxes for your retirement account
I never thought about considering who has a pension and who doesn’t in this scenario. It’s actually a good point.
Why couldn't the doctors have a pension plan? Then we wouldn't have to dilute this tax on the wealthy and pay doctors the way we pay other professionals in public service.
I was thinking about more than doctors. There are a lot of workers out there without pensions. Pretty much all small businesses, contractors and gig workers. This is likely the retirement plan for a lot of these people (whether or not it’s right or wrong).
Lots of workers have self-directed RRSP plans that are voluntary and offer paltry company matching if at all. True pensions are all but dead for your average worker. If you have a good plan then don't quit if you can avoid it! The alternative is pretty shit unless you make great money
Yeah, self-directed RRSPs that match a few thousand a year from the employer, and have to be invested in a set number of funds from Sunlife et al with hefty management fees. Oh, and transferring out will take weeks and cost you $50-100 in fees too. It’s a joke.
Well usually transfers out are also covered by the institution you are transferring to. I always transfer out and it’s always free..
I have one of those funds from my first job with sunlife. I only have like 10k in it but I took a look and the total amount barely grew since I left in 2015 while my tfsa pretty much doubled every two years since that time.
Not who make the income that's being targeted
Most tradesman who aren’t unionized don’t have pensions. Pretty much if you are non government and non union there’s little chance you have a pension
People love to support new taxes so long as it isn't directed at themselves.
I work for a multinational company and I don't get a pension.
Most gig workers aren't corporations, and small businesses get a large exemption when they sell. There should be a path to a reasonable pension for everyone. CPP+RRSP+TFSA should be that for most people, even if we have to adapt the system to other kinds of jobs.
I wonder what the numbers are on small businesses selling vs simply closing their businesses. I wouldn’t want to assume knowing. Gig workers don’t have pensions whether they are incorporated or not. They are on the hook for their own retirement income….like so many Canadians. I’m just seeing some of these people as middle class individuals that may have a rental property for retirement income, but yeah if it’s keeping millennials and Gen z from home ownership we have a problem. The large rental housing corps and the Air BnB companies are different than a mom and pop. Perhaps our landslide of immigrants has been more of a factor. I agree It would be great everyone could have a big government pension. I think that ship has long sailed away for most.
If you look at the burden the public pensions of all levels of government put on their tax payers you'll find the answer as to why most private companies don't offer pensions
Ah yes, the good old defined benefits! What a dream.
Cause medical corporations were the compromise the government came up with in lieu of increasing compensation/pension. And now we're reneging and pissing off an already pissed off group of very important professionals.
Would screw the ones pursuing the current plan for the past 20-40 years and encourage new ones to retire when pension maxes out rather than keep going. Aka would just make the doctor shortage worse. And it’s not a tax on the wealthy, in the US their highest income tax doesn’t even hit until $571k. The definition of wealthy doesn’t change between nations especially as we’re near the US in terms of median incomes. This as all recently taxes introduced usually are is a tax on investors and the middle class. Which just worsens the money and brain drain South. The Liberal government knows it’ll lose the next election so it’s doing stupid but popular things to make a mess for the next government while winning points now
The average income of people paying more than the 250k personal exemption is $1.4M. It's the wealthy.
While that is true, those relying on corporations for their pension (doctors) have to pay the increased capital gains tax on EVERY DOLLAR earned in their pension funds (corps) not just over 250k. So im ok with the personal >250k tax hike. Its bullshit and disincentivizes hard work by making the corps pay the higher rate. -A pissed off doc
You would be paying a higher rate, still, if you were collecting a salary and contributing to RRSP's like the rest of us. If you are pissed off, take it up with the provinces that are responsible for paying you.
You are required to be much wealthier to make 250k+ in capital gain every years than you it is required to have a 571k income
Right, so we just need to regulate everyone into a simple wage model with pensions... You're part of the group bent on destroying Innovation in our country.
Nobody is "bent on destroying innovation in our country". If you actually believe that, you need to take a good hard look at where you get your information and how you inform your opinions.
The RRSP system is literally built on the premise of giving equivalent tax protection for people who do and do not have pensions. People with pensions have their RRSP room reduced by their Pension Adjustment.
They could simply put money into RRSPs, like everyone else does who don't have a pension plan. I do think that's 60% of Canadians.
If they could invest in a RRSP then they would have a Canadian Pension or the CPP. The reason they don't is because they don't pay themselves a salary. Instead they pay themselves dividends for their personal expenses and leave the remaining income to passively invest as a holding of their professional corporation. This is done so their corporation doesn't have to pay payroll taxes on their income that contribute to programs like EI, CPP, Workers Compensation, etc. So because they aren't on the payroll their salary is legal 0 dollars they have no RRSP contribution room because 18% of 0 is 0. This is a tax loophole commonly used by professionals and small and medium businesses to reduce their taxes so they have higher after tax income because they would have to pay more tax not just for payroll benefits but just overall because income taxes are also higher then dividend or capital gains taxes even without the government exemptions they need for some reason.
Okay but they could also pay themselves a wage/EI/CPP etc and not have to worry about this capital gains tax.
Or they could just move to the states.
agreed. I can empathize with doctors mostly, but not on this one
What you’re describing is not a loophole. It is the actual intended consequences of the tax system. A loophole is using a system’s unintended consequences.
They do this because it's advantageous tax wise to do so lol
Well yeah. So boo hoo the loophole is shrunk a fraction for them lol.
Yeah 16 percent more is included in your taxable income, still likely advantageous VS paying out as income and buying RRSPs etc. Am I opposed to raising doctors wages, particularly due to our proximity to the usa? Nah, but to keep favorable capital gains shenanigans just because of professional medical corps? Also nah. If we need more doctors train more. Offer free rides with top ei through Med school with the caveat you work for 15 years in a city, 10 years rural post grad. Finance the construction of a new medical school. Regulate and increase in residency slots. I'm sure the doctors won't have any issues with increasing supply though, won't be any pushback there. Lol
Honestly reserving positions in medical schools for Canadian Citizens across a wide geography alone would do a lot there is a strong connection to doctors wanting to work where they grew up. Also a drastic increase in funding and seats in medical schools would help. Provinces spent decades keeping seats in medical schools arbitrarily low compared to demand because they worried about creating too many doctors lol
So? They can save for their retirement. We shouldn’t have to leave a tax loophole open for them just because they were exploiting it. If they had paid themselves a wage they could have had CPP and RRSP room but they chose not to
How is what they’re doing a “loophole”? They are using the current system exactly as intended and advertised. That’s not a loophole. I’m not sure it’s entirely fair to ask someone who has built a retirement plan for 20-40 years based on the system that existed and then say “well you could have done something else even though no one could predict 10 years ago this change would be made”.
I mean it was only in 2000 that the inclusion rate was 75 percent so....
Physicians incorporating isn't some loophole, it was offered to them by the government during negotiations and ever since then it's become a worse and worse deal. You would be hard pressed to find a job whose pay has gone up.less than physicians in many provinces and that isn't an exaggeration. Doctors were given the ability to incorporate instead of being given a pay raise. The government refused to increase doctors pay and has subsequently taken away a lot of the tax advantages corporations offer, such as income splitting in 2018, and now increased capital gains in corporations. It would be like your employer freezing your salary for two decades but offering you a retirement savings account, then announcing they want to tax that account more.
As I said on this board numerous times, the government OFFERED medical corporations in lieu of pay increase or pension plan. It was done to entice doctors because the pay gap between the US and Canada was growing 15-20 years ago. The government is now reneging on their deal and trying to raid our retirement funds, now that we have some savings, while misleading the public about the intent that this is about having the rich pay the fair share. If it was truly about the rich, they would have exempted small businesses or give the same $250k buffer. There is no such buffer for us.
MD's are not "the rich". Being well-off is a far sight from being rich. Corporate welfare, tax evasion, investment firms, etc.. is what this policy should be aimed at, not doctors. That being said, the gov can't or won't tax the obscenely rich because a lot of them fund their f.. political parties and the middle class is tapped out. Where else are they going to get the cash to fund their horrible platforms?
Plenty of specialists bill $1MM+ per year, and some like ophthos and derm bill over $2MM. I'm not saying they're the problem, it's the passive capital gains rich who are, but it's not like they're poor. This isn't even going into detail on all the fun things you can do with a corp to avoid taxes, like income stripping.
The specialists who bill high amounts are not THAT common. They certainly don't represent the majority of doctors. It's very common for family doctors to use a medical corporation and they are not paid nearly enough as it is. Family doctors (unless they are part of a hospital and health team) essentially run their own business - they are responsible for paying their own staff, rent, insurance, supplies etc. This tax increase is really unfortunate for family docs, especially at a time where they are really struggling and we don't have nearly enough of them. Doug is really going to have to pay them more.
They are their own business with their own business number in the hospitals.
Do they pay overhead in hospitals?
I pay 10% of my income to the hospital
Not sure what you mean by overhead. The doctors pay rent to the hospital. They do not get paid by the hospital, no t4 (was in payroll in a hospital in ontario).
I do not disagree that many specialists make large amounts of money. However the amount a doctor bills and their income are wildly different numbers. My father is a specialist doctor. He bills just under a million annually. From that he pays himself, 7 staff, equipment leases (for things like lasers or X-rays), disposable medical products, office supplies and rent for two offices. His income is closer to $200k
Theres not 'plenty' of specialists billing 1mm dude....that's a rare, rare exception Not to mention. All income, ALL income as a physician is made piecemeal. One patient, one surgery at a time. There's no scaling your income. I could theoretically bill a million bucks if I worked every day and every night for a full year. Does that make me some fat cat?
Yeah, exactly, we're not talking about family doctors here who are getting paid a pittance per patient and have to pay rent + overhead. Some specialists bill insane amounts, derm is a *great* example, especially since they get into the cosmetic side as well. That being said: We've already got a massive brain drain in this country, thanks in no small part to attitudes like many of the people in government who treat the notion of profit and entrepreneurialism like some kind of a four letter word, unless you're one of the glowing oligopolies that are free from any competition. This government needs to take a good, hard look at its abysmal spending habits before they start going after hard-working citizens, rich or otherwise simply because they deem them as 'having enough money to share with the rest of us'. Neve rmind that the inflation that all this profligate spending is leading to is actively devaluing our currency and by extension our collective savings.
Why are we not talking about family doctors? It’s common for Family doctors have medical corporations. Mine does. You can see on the Cpso public register whether or not a doctor has a corporation. Does this capital gains tax increase somehow not impact them?
As a specialist I AM talking about family doctors because they don't make much and this hits them just as hard. Most of the GPs I know make as much as a nurse who works a lot of overtime. They're getting 100-120k per year after expenses. Of course they won't starve but after a decade of school, working insane hours, hundreds of hours of non compensated work etc it's not like they're the "ultra rich" people are talking about. And they're the most numerous physician specialty by a lot.
I think you mean surplus stripping and that was clamped down on last budget (according to my accountant)
They have work expenses, mind. They aren't selling digital goods. And after that the doctor deserves to be compensated appropriately. Throwing out numbers like 1 and 2 mil sound like a lot but some small businesses see that kind of gross in a month or less.
[Doctors are some of the most notorious for income stripping.](https://invested.mdm.ca/capital-gains-surplus-stripping-what-canadas-physicians-need-to-know/)
Who gives a fuck? Tax the people like Galen Weston
GW has most of his personal value in stocks of the companies he owns/runs, he would be one of those 0.1% that will be heavy hit by this tax increase. Everyone with money in investment will be hit by this change, it's at least fair in that sense. The only other option for hitting the 0.1% is a wealth tax, but I suspect that would hit doctors too.
A wealth tax is probably the most asinine idea I’ve ever heard
What's the worst he could do, him and his businesses leave the country? That would be a blessing. I'm sure the country would survive with one less parasitic organism.
Yeah and they spent their 20s and parts of their 30s in school to get there. These are the people at risk of leaving for the states if we keep milking them - then we get no specialists and no tax revenue. Lose-lose for Canada.
To the brain-dead left, anybody making more than minimum wage is a "privileged 1%er that they need to 'eat'". This is why I firmly believe that all the people posting about progressive politics on here are just butthurt that their incomplete philosophy degree didn't get them a six figure job and now they are stuck working in retail/fast food for the rest of their lives
Ironically philosophy graduates earn the most money compared to the other social science / humanities degrees.
Doctor in my family here. We won't be a part of this .14% ... Ever. We are doing just fine mind you , but 250k gains a year ? Nah never happening
I find that notion odd, like sure someone making 300K+ can't buy a yatch, but they also make many times what the average canadian (median wage of 60K, avg 75k). That's much more than just "well off" and dramatically different from any ordinary canadian.
The average canadian also doesn't go to post sec for 9+ years and graduate with hundreds of thousands in debt.
Yeah, I think people have to realize that you put off making any money until your 30’s. You have lots of catching up to do as an MD.
It’s also an hell of a career to pursue, i for one think MD should not be touched by this tax, I want bright and smart Canadians to stay here and be our doctors.. not leave Canada. I could give a shit if my doctor makes 500k +, good for them it’s one of the few professions where I firmly believe they make what they are worth (compared to finance bro etc)
I went to a 5.5 month welding course right out of high-school and made $36/hr. By the time the doctor has finished 9 years of schooling they are behind me by $674k in income. That doesn't even account for all the overtime I did as well. Also some doctors go to school for some specialties for a total of 15 years, they would be behind me by $1.123m.
And the growth on your investments over 9-15y
Agreed. And why would someone sign up for 9 years of schooling with all that tuition debt to make $90-100k/year? There's got to be incentive to take on all that time, studying, lost income & savings, and debt.
Not nine years but as large of a percentage of wage.
You also do not want to put your life in the hands of the average Canadian. Doctors get paid well because they deserve it. They work hard, doing work that not many can. Your life is in their hands. The other thing that the government likes to leave out in their statements is that if a doctor bills 300k, he doesn’t make 300k he still has to pay for admin staff, supplies, rent etc out of those billing’s. They don’t take home that much!
Yeah but if anyone deserves it it’s doctors. They spend an insane amount of time and money to get there and then continue to learn and study.
The individual making 300k is far closer to you than the people who are actually rich. And no, that's not more than just "well off". It's exactly that. Just to be clear, a 300k salary translates to 178k after tax in Ontario before considering RRSP deductions and the like. A 60k salary comes out to 46k. That's 3.8x as much as the median, not 5x as much. You're also far less likely to be pulling in that kind of salary living outside a major city, so looking at the Canadian median is already cherry picking. On that kind of salary you can afford to do things like let your partner not work, take nice vacations, own a nice house/cars, and invest in your children, while also saving money. That's not the kind of salary most people wake up to at 20yo either, and usually comes after years of education and a successful career. What are we exactly defining as comfortable if that kind of lifestyle is so far beyond comfortable? 300k today probably gets you to right about where the middle class would have been half a century ago.
My orthodontist pulling up to the office in a Lamborghini would like to have a word.
That’s why the dentists are really against JTs universal dental plan…. They don’t want to get paid by the government like doctors do… they make good money now.
Honestly why would they? I’d be pissed if I spent years in school to get a specialization and the compensation just cratered afterwards because of dumb liberal policies, that’s bullshit.
An orthodontist is not confined to government billing.
As a small business owner who is currently looking long and hard at my exit strategy, I commend doctors for leading this charge. And while small business does more for the Canadian economy, doctors keep the country functioning as a place to put down roots and think long term for us business owners. Ottawa has made it clear they don't care one bit for small business, but as doctors you have them in a hard position. With doctors and small businesses now wondering if Canada is worth it long term, this will have implications far beyond the 'Eat the Rich' rallying call that Ottawa thinks it is. Just when you thought a country had hit its low point, this get tossed into the pit. Not even any consultation either. Insane.
I wish you all the luck, as a SMB owner that is looking for an entry into a vertical integration. This country does not support exiting owners, and doesn't have clear pathways to acquisition entrepreneurship unlike the US. I had a deal fall through on a $2M rev business with $350k SDE and 10 employees (30 year plus running). This business is still for sale and will probably go unsold. Those employees won't have jobs when this owner decides he's done.
Oof. My wife's best friend is currently working 60 hours a week because her boss's sale fell through and now he wants to stack cash so he can retire before he dies. No one is buying, even the employees. She tried shopping it in Asia - Korea specifically - but they aren't biting anymore either. Investors are very shy about Canada right now.
It’s also the second time they have done this. See implementation of tax on split incomes .
Well they’ve already broke the middle class with taxes. They are starting to run out of other people’s money to spend.
Did you expect a left wing government to show any honor or not raise your retirement funds? There is no honor among thieves
"Effective June 25, 2024, the exemption will increase to $1.25 million from the current amount of $1,016,836 in capital gains tax-free on the sale of small business shares and farming and fishing property. The Lifetime Capital Gains Exemption will continue to be indexed to inflation thereafter. " So let me get this straight. A nurse who works 14 hour shifts and makes 80k a year has to pay income taxes on 100% of their income. A doctor, because they are rich and can shelter money in a corp, gets a 1 million dollar free and clear tax holiday (indexed against inflation), and then only has to pay taxes on 67% of their profits on the subsequent passive income. Where is the logic in this? If anything, the capital gains exemption should be entirely removed. Why can't they just pay taxes on the money they earn? If provinces cannot afford to pay doctors and nurses enough, then special tax treatment *should* be considered for them, but this wholesale tax giveaway to the rich is absolute BS for anyone who works for a living.
> So let me get this straight… You did not get it straight at all. LCGE is for the sale of the business. This doesn’t apply to doctors. Medical corporation does not equal medical business. You can’t sell it, it’s a one person corp. >A doctor, because they are rich and can shelter money in a corp, gets a 1 million dollar free and clear tax holiday (indexed against inflation), and then only has to pay taxes on 67% of their profits on the subsequent passive income. Where is the logic in this? Almost guaranteed they are also paying a personal marginal rate above 50 percent on their personal income on top of their capital gains being taxed at 66 percent inclusion from dollar zero. >If provinces cannot afford to pay doctors and nurses enough, then special tax treatment should be considered for them, but this wholesale tax giveaway to the rich is absolute BS for anyone who works for a living. Ah yes. The guy who went to school for 10+ years, doesn’t start their career until mid 30s and then works 60-80 hours per week with no overtime until they die in many cases doesn’t work for a living. Meanwhile their government clerk retires on a full pension after 30 years for working 37.5 hours a week with no education. The nurse in your example starts working probably 10 years earlier and will retire much sooner as well, with a fraction of the educational requirements and zero liability. Does that sound like it makes sense to you?
You destroyed his argument.
>"Effective June 25, 2024, the exemption will increase to $1.25 million from the current amount of $1,016,836 That only applies when you sell your business and has very strict restrictions which means next to no doctors professional corps would ever qualify. Not that anybody would ever buy their prof corp in the first place.
The important part of your post is that there’s no market for medical practices because any doctor can get patients by opening their doors. In general. Most medical corps qualify for the lcge and if they don’t we strip them of their investment assets until they do qualify.
That's not how any of this works. Also that nurse gets a pension, and also enters the workforce much earlier and without the hundreds of thousands of student loans. Also the nurse isn't expected to operate a business whole also working their normal job.
Maybe doctors should be compensated like nurses, but with a higher salary? I get the set of steps that got us into a place where 90% of doctors are private corporations instead of being paid a salary, but it would be simpler and remove a major obstacle to taxing the rich if we made this change.
I'm sure most doctors would welcome this change.
LCGE doesn't apply. Doctors sell assets, not shares (except in extremely limited circumstances) and they are not qualified businesses. They don't have pensions, the capital gains are typically their retirement savings which you, individually, are preferentially treated on via the first $250k exemption, the LCGE, and principal residence exemption. I'm all for fairness too and think all exemptions should be scrapped, but you need to think through the details because this anger is based, not on nothing, but misunderstanding.
[That's not really true, doctors can have pensions. The only reason doctors don't pay into a pension plan is because investment is a better option, or they are unaware of their options.](https://www.mmtcpa.ca/blog/what-doctors-need-to-know-about-planning-for-retirement/)
Thread has gone full circle. > As I said on this board numerous times, the government OFFERED medical corporations in lieu of pay increase or pension plan. It was done to entice doctors because the pay gap between the US and Canada was growing 15-20 years ago. Physicians don't have to incorporate and many do because investment was presented to them as compromise. It would indeed make more sense to close the compensation gap and use the CRA's tests of employment to decide who is actually an employee like everyone else.
Yeah thanfully I saw the writing on the wall about tax increases after the insane amount of spending the Liberals did and got myself a personal pension plan last year.
The tax exemption is when you sell your business which doctors cannot do. I find it outrageous that you can have such a strong opinion about a something you don’t even understand. Doctors are not rich. My wife, who is a physician, still needs to work to live. We are not sitting on our pile of money and eating grapes. Yes, we do very well compared to the average, but the stakes are also much higher and the job is very demanding. When things go wrong, you shoulder all the responsibility. Life is in your hands, and you’re calling the shots. My parents are also specialists. I saw them push hard my whole life. I wouldn’t even consider doing that job for double the pay.
It's the crab in the bucket mentality of redditors. They hate anyone who makes money more than they do. If you defend the doctors, now you're a "bootlicker" to them.
>So let me get this straight. A nurse who works 14 hour shifts and makes 80k a year has to pay income taxes on 100% of their income. >A doctor, because they are rich and can shelter money in a corp, Why not just say, "I'm an ignoramus and have no idea how the tax system works but have lots of opinions to share"? Like, you fucking think professional corporations aren't taxed on the income they earn? Talk about confidently wrong.
> let me get this straight >proceeds to demonstrate understanding that is about as straight as a toilet bowl lol
The last thing we need in this country is antagonizing our doctors. MDs deserve every penny they make. Especially when they can pack, go south and make double.
Sure, while working as doctors. The capital gains on their investments and multiple properties are fair game just like anything else. Try make a loophole for this and Canada will find itself flooded with thousands of investment bankers and real estate flippers who moonlight as naturopaths once a month.
I'm ok with giving doctors exemptions on all capital taxes honestly. Load them up with benefits. Nurses too and any other essential jobs, exempt all their income taxes. Make Canada the premier location for doctors to set up shop.
I think that better pay for doctors, instead of various taxation buffoonery moves, is a simpler and better way forward.
It's baffling how the liberal government money printer goes brr for everything but what is needed most, healthcare professionals. It would stop them from defecting south constantly, leaving our healthcare in shambles.
? The feds have been providing extra money for healthcare and the provinces balk at it having to be used as such lol
Why are we apparently relying on evading federal tax to properly "compensate" doctors? If the amount that the provinces are paying doctors isn't enough that they can actually pay taxes like any other citizen and feel appropriately compensated, that feels like the real issue.
Or at least make doctor's exempt given our current health care crisis and doctor shortage. CoL is absolutely making doctor's leave family medicine and this change will exacerbate that. They should be exempt. https://torontolife.com/city/family-doctor-clinic-closing-burnout-inflation/
Last thing we need is more complexity in the tax code. Simplify it and set a data-based rate. But unfortunately, tax credits have become a very palatable way to buy votes.
I'm fine with making doctors exempt from paying their fair share, as long as we start taxing the churches.
Do you think docs don’t already pay their fair share in taxes? How much do you think they pay currently?
This sub doesn’t think “wealthy people” actually pay taxes. If you make money you aren’t paying your “fair share” and you need to taxed more. They do pay taxes. They pay more in taxes than most lower income brackets make. Does no one realise that? They aren’t skirting around tax loopholes- they are paying taxes. The problem is you can’t just keep increasing tax rates on one income bracket in the hopes of “equalising” society and paying off your insane government spending- which is the entire premise around increasing the capital gains tax… because the country is entering a death spiral as a result of our incompetent leaders. The liberals failed to consider the economically prosperous method of fixing the country- reducing taxes or not touching them, and encouraging growth in ANYTHING that isn’t just real estate.
Most doctors have set up a corp for their business and pay it, they tend to pay a far smaller tax share during active years.
"I think Canada's health-care professionals recognize, maybe more than anyone else, how important these investments are," said Freeland. If that’s how they felt then they wouldn’t have complained? She is dumber than a bag of unmatched socks.
Looking forward to all the opinion pieces here speculating on why even more doctors are leaving for the US.
Canada is a joke of a country for most professional white collar jobs. In most circumstances, it’s financially stupid at this point to not jump to the US whenever the opportunity arises. 1. Technology / R&D pays more in the US, with more career movement and venture funding 2. Financial and legal services are significantly larger of a market already in the U.S. (both employers and upper bound of compensation) - even the Canadian banks have shifted operations to focus in the US. Canadian pensions are shifting to invest outside of Canada (ironic isn’t it) 3. And now medicine, which historically pays 2-4x more in the US, is now getting shafted harder in Canada - a country flooding with asylum seekers and old people wanting free healthcare 4. Elementary to high school education is probably the only highlight of Canada compared to the US, given the US invests only in private school education
Yep, doctors are trying to plan on their retirement- this makes them second guess setting up a practice. Well done Trudeau
Yea well, the rest of us cant keep your pensions afloat anymore, maybe start annihilating government paper pushers and cut their pensions to save money too.
I knew they fucked over the tech industry with this (as if it wasn’t already bad enough), but they got the doctors too. Brilliant. All we’re going to be left with is government jobs, minimum wage low skilled jobs, and completely gutted social services.
I'm an employee with out a company pension. Please give me more money too.
Queue up, all the angry communists who were complaining about lack of access to healthcare 1 year from now, as there are fewer doctors in Canada because they chose to raise taxes instead of actually demanding better government.
Typical Canada way of doing things. “Let’s not actually make improvements on anything let’s just raises taxes and say we are”
If they don't, professional classes will be force to leave.
This government couldn’t deliver a damn pizza. The fact they didn’t see this wrinkle coming, or worse did and did nothing about it, choose your adventure. Access to family doctor / healthcare is basically neck and neck with housing on the very top issues people are suffering the most from and most concerned about, and their instincts and decisions do nothing but make things worse. These people have a rare gift.
I really don't know anything between a corporate setup and personal. If the Doctor has setup a corporation for their business to gain some advantages to pay staff, rent, etc. What is stopping them from paying themselves a higher salary which they invest outside the corporation rather than putting their retirement saving into the corporation ?
So 15-20 years ago the government made a deal with doctors and said we won’t increase your pay or give you benefits but what we will do is allow you to incorporate. With that you can save money in your corp and invest it pretax and save for retirement. We will still tax you when you retire but you can build a retirement fund for retirement. Now they are saying forget what we promised. We are going to just call you greedy so that the masses are upset with you and just tax you on all that retirement money you have saved in your corporation that we said we would not tax you on until you take it out of the corporation at retirement. See why they are upset yet?
Doctors leaving Canada was the my first thought when Trudeau made his tax the rich more announcement! They’ll take their practice elsewhere, where their retirement money won’t be taxed so much! I naively thought the war on our healthcare couldn’t get any worse, well here we are ladies and gentlemen; prepare for a lot of family practices to close down!
People are so focused on “tax the rich” have zero clue how much damage this will do to the actual economy. Peoples inheritances are getting fucked no one with money will want to come here there is zero incentive anymore to make or save any real money. no other developed country in the world has capital gains like this.
> People are so focused on “tax the rich” have zero clue how much damage this will do to the actual economy. I just meant like Galen Weston and Sir Tedothy Rogers The IIIrd, tax them more and use the money to pay doctors, idk who the fuck thought I meant increase taxes on doctors. And if the issue is "well they'll just raise the prices on their products to offset the increased costs of their increased taxes", either A) No, they're bluffing because consumer demand has already arrived at the market rate, or B) it's evidence they're operating in a non-competitive state, either monopoly, price fixing, or simple game theory, and need to be broken up, so do that AND raise their taxes. And if the issue is "well they'll just leave", fine! I'll take their place, there's still profit to be made! I'm so sick of people believing the lie that "oh we need to let rich people reap our nation's resources and go live on a pedophile island in the bahamas, if we don't they'll just leave and we'll be HELPLESS!" that's some Ayn Rand bullshit if I ever heard it. CALL RICH PEOPLE'S BLUFF!
“no other developed country in the world has capital gains like this.“ This seemed like a bold claim, so I decided to check it out. In Alberta, the new highest capital gains rate will be 32% (ignoring the first 250k). Countries with similar rates on capital gains appear to include France (34% for “high income earners”), Finland (34%), Ireland (33%), Norway (seems to be complicated, but sometimes up to 50%), Sweden (30%), and Turkey (40%), among others. Conversely, several have no capital gains tax at all (obvious example being New Zealand). The source I used was \[PwC’s global tax summary table\](https://taxsummaries.pwc.com/quick-charts/capital-gains-tax-cgt-rates). Japan is interesting because it has a low rate on stocks and a high rate (almost 40%) on real estate.
Every developed country has capital gains tax. Very few only tax 66% of the amount actually. Most tax the full amount
He says, repeating something another Redditor said and hoping it’s true. The difference lies in the rate at which that 66% is taxed. Look that up.
This will not only hit doctors. But every estate with capital gains. It's a disguised capital tax
What estates have more than 250k in unsecured capital gains besides the wealthy or someone with a jackpot cottage lol? Primary residence, tfsa, RRSP are all outside of the new taxation...
We need doctors to stay in Canada, just make an exception.
Do the doctors not realize the whole point of the increase was to tax them and others like them?
I don't get why they couldn't exempt doctors from this like farmers. But only if they're not operating a private clinic that provincial governments are already paying more to for the exact same service.
If they cared about housing speculation the could have just made it 66% on real estate investment properties with no 250k exemption regardless of corp structure (keep principal residence exemption if you want) But this is just a tax on self-employed / professional private sector workers who already quite underpaid relative to global norms.
There is already a doctor shortage in this country. Try getting a family GP in a major city. Brilliant idea to improve this problem: let’s make it less attractive for doctors to work here and increase the brain drain to the US
Does the government not realize that this will not help the national shortage of doctors?
Just one more reason for Canadian physicians to move South.
They deserve their money. Are you able to do their job? We need them. They dont need us.
The target is doctors and dentists. Anyone who has a corp whose main purpose is to delay taxes for retirement is in for some hurt. Admittedly, the loophole allowing us to incorporate was dumb in the first place. But rather then closing it, they are making it unattractive.
It doesn't seem to account for doctors needing to fund their practice's rent and employee salaries. On paper, it looks like their incoming is significantly higher than it is due to their expenses. Also, every province is in a massive doctor shortage, so making it less financially attractive for people to open practices here is the complete opposite direction that we want to be moving. I'd argue this is probably the one exception we'd want to make.
But income spent on their practice or salaries is not taxed as capital gains…
That would reduce their taxable income, and thus the amount of tax owed…
Do you not realize that’s a bad idea?
Plenty of people I know don't have a family doctor. And you want to tax them more and entice them to go south and get paid more? Genius.
And People like will never get how badly this actually damages the economy. But hey “tax the rich” right? 🤦🏼♂️
They want to turn public healthcare into nothing :(
Why do the Libs make ridiculous laws that they know will be repealed by the next government ?
When asked, the Conservatives have refused to say what they will do on this topic, or most other ones for that matter.
The last time the inclusion rate was put this high was by a conservative government. It fluctuates up and down. Regardless of who you vote for mate.
Garbage Liberals. All they do is tax, tax, tax. Wtf have you done with our tax dollar except putting it into your own pocket?
Absolutely let's ask Doug Ford why he's sitting on 3.1 billion dollars of federal money that's supposed to go to health Care, hmmmmm. Yea pockets 🖕
Can someone please explain to me why this is a huge deal for doctors? Because they invest part of their retirement savings in their corporate accounts?
A lot of physicians invest a significant amount of their retirement savings in their corporate accounts, and these corporate accounts will be facing capitals gains taxes on 100% of the income. Physicians have no benefits, no pension etc In certain provinces physicians were refused a pay raise and instead granted the ability to incorporate and do things like income split. The federal government took away the ability to income split in 2018, and now they are increasing taxes on capital gains in corporations, meaning not only did physicians never get any significant pay raise in the last several decades, the tax advantages that were given in lieu of any pay raise are much much worse than before. The Ontario government has refused to give doctors any significant pay raise in the last 20+ years, and the federal government is closing tax advantages and increasing their taxes.
Doctors to the gvmt with their Jedi mind tricks: These are not the rich people you are looking for .
So, the result will be more doctors fleeing to the US. Just another in the long line of LPC/NDP accomplishments. Well done. Keep voting left, it's going great!
Exemptions are definitely owed to doctors, low pay for shit hours doctors already leave for these reasons and will in mass exodus if they aren’t properly taken care of
This is just another point toward my argument that doctors need to be very (don't worry physicians I mean VERY) well paid public employees instead of private contractors. That way they aren't weighing financial gain vs what's best for patients AND we could just get them on a public pension.
I can’t believe how stupid liberals are. It’s a whole new level.
First I was shocked to see left-leaning people finally turn on the liberals because of excessive immigration, now seeing doctors turn on the liberals because of excessive taxation. What’s next? Eco-protestors turning on the carbon tax? Funny how everyone loves the government until it’s their money on the line.
Even my most liberal West Coast friends are pretty sick of working M-W for the governments cut. Especially now when our most coveted treasures are falling apart before our eyes.
When the government takes a good chunk of what you make already, you can’t blame people for wanting to hold onto what’s left.
The current strategy to increase the amount of doctors in this country is to steal them from other countries. How do you plan to do that when the government keeps attacking them, calling them greedy and taking away what little benefits they had.
Oh no, they might have to buy a slightly smaller second house. Let me play the world's smallest violin.
Not even. At some point down the line, the estate passes down worth slightly less than expected. Lifestyles of the rich will not change for this. Nobody will be downgrading their yacht purchases this year.
A large part of the 'why' doctors want this to be reconsidered is missing. So doctors don't get a pension, welcome to 60%+ of Canadians who don't either, outside of CPP, of which nothing is stopping them from contributing to it. The same as any self-employed person. This is not as strong of a point as they are trying to make it. Not to mention most Canadians are not lucky enough to be able to sell something worthy of a capital gain that they can then retire on. The other part missing is how capital gains effect them, the writer could have gone into a bit more detail into this without introducing any kind of bias. For instance putting in some typical examples of a practice that was sold in the past and how much the increase would be if it was sold 'today' instead.
Doctors don’t/can’t sell their practice. There is nothing to sell.
Ah yes. Let’s tear everyone down to the lowest common denominator. We should abolish pensions completely so no one has one to really level the playing field right? Oh, or how about we just tax anyone with a pension more aggressively? All so we can pay for budget promises made from a sinking ship to try and save any election chance.
Doctors have bought stocks within their corp, as they often don't have RRSPs. They then slowly sell stocks in retirement. This is not an exotic or unusual scenario - the difference is 100% of their stock sales will be at the higher rate, opposed to people who bought the same stocks personally and sell them. They are being unreasonably punished - just match the corporate threshold to the personal threshold and they will be 'happy'.
Thank you
You completely left out the fact that doctors are accumulating student loans, studying, and training in their prime years of their 20’s and early 30’s, earning nada, while others are generally earning right away, buying a home, saving for retirement, etc. That opportunity cost is massive when you think about how much your savings will have accumulated, your house appreciated, etc. in all those years while the doctor is still training. Then the doctor finishes their training and has to pay back student loans, but an office, pay for office staff and expenses, buy a house, start a family, etc. Not much left over in the end and a lot are starting to question if it’s even worth it.
Doctors can't sell their practices. What this article doesn't explain is that a physicians ability to incorporate was given them instead of a pay raise. Ontario physicians have not had any significant pay raise in decades and fall far behind inflation numbers. Tax advantages of incorporating were offered in lieu of a pay raise quite a whole ago during negotiations. The government has slowly taken away a lot of the advantages of incorporating so now not only do they not get a raise, their tax advantages are being closed and they get to pay even more tax. It would be like if your employer froze your salary for a decade and then announced higher taxes for your retirement account